First of all, Freelancers are considered self-employed even if they have agreements with companies. They set their own rates and they work on their own preferred schedule, to progress on a specific project or projects.
Freelance work contract
A freelance work contract or agreement is a legally binding document between a self-employed freelancer (independent worker) and a client/company, which outlines the main terms and conditions of their work relationship. Usually, such a document defines the purpose of work, potentially specific project deliverables, payment details, deadlines, if any, and other essential details affecting the collaboration. It serves as a plan for the project or projects, but also as a protective measure for both parties, outlining their expectations and aspirations. In short, a freelance agreement prevents any professional misunderstanding or conflicts and reassures both parties of the smooth progress of their collaboration in case of any dispute.
Types of Freelance Contracts
- Project-Based Contracts:
These apply to a single, clearly defined project. The agreement specifies the scope of work, deliverables, deadlines, and payment terms. Once the project is completed, the contract automatically ends. - Ongoing Contracts:
In this type, the freelancer provides continuous services for a fixed monthly or periodic fee. There’s no specific end date, offering both parties a stable, long-term collaboration. - Hourly Contracts:
Here, payment depends on the number of hours worked. This type offers flexibility for both the client and the freelancer, as workload and duration may vary depending on project needs. - Licensing Agreements:
These contracts are common among creatives – such as writers, photographers, or designers – and regulate intellectual property rights. They define ownership, usage, exclusivity, duration, and other license-related terms. - Non-Disclosure Agreements (NDAs):
An NDA ensures client confidentiality. It can be included as part of a main contract or function as a separate agreement to protect sensitive information shared during collaboration.
Why a Freelance Contract Is Important
A freelance contract is essential to define the rights and obligations of both the freelancer and the client. Even if the collaboration is temporary, a written agreement ensures legal clarity and protects both sides from misunderstandings or disputes.
Key reasons to have a freelance contract:
- Guarantees the freelancer’s financial security and timely payment
- Clearly defines the scope of work, deliverables, and deadlines
- Outlines ownership of intellectual property and usage rights
- Establishes confidentiality obligations and data protection standards
- Describes termination terms and dispute resolution procedures
Essential elements every freelance contract has to include:
- Contact information of both parties
- Scope of work and payment terms
- Intellectual property and confidentiality clauses
- Termination and amendment provisions
- Liability and indemnity terms
- Signatures confirming mutual agreement
Georgia’s Individual Entrepreneur (IE) System: The Perfect Model for Freelancers and Digital Nomads
At the heart of Georgia’s growing appeal to freelancers lies its Individual Entrepreneur (IE) structure combined with Small Business Status (SBS) – a simplified legal and tax framework designed to promote entrepreneurship, including for foreigners working remotely with international clients.
When you register as an Individual Entrepreneur, you are legally establishing a personal business under your name. Afterward, you can apply for Small Business Status via the Revenue Service portal, which significantly reduces your tax obligations if approved.
Key Benefits and Rules of the IE System
- 1% tax rate on annual turnover up to 500,000 GEL (approx. USD 186,000)
- 3% tax rate applies to income exceeding that threshold
- If you surpass the 500,000 GEL limit for two consecutive years, you lose SBS eligibility
- You must submit monthly turnover declarations and an annual tax return
- Registration can be completed in person or remotely with a Power of Attorney (POA)
The Advantages of Freelancing in Georgia
Compared to freelancer taxation systems in countries such as Germany, Spain, or the United States, Georgia’s IE model offers a remarkably low and transparent tax regime.
More importantly, freelancers operate as legally recognized business entities, not merely under visa permissions. This status allows you to:
- Invoice international clients under a registered business name
- Open business bank accounts in Georgia
- Build a credible and compliant global business foundation
There are no minimum income requirements, no need for local partners, and no large investment thresholds to enjoy tax benefits.
Tax and Bureaucracy Advantages for Freelancers in Georgia
Built-In Tax Benefits
Unlike many freelancer visa programs worldwide, Georgia offers immediate tax advantages. Once you register as an Individual Entrepreneur (IE) and obtain Small Business Status (SBS), you qualify for a 1% tax rate on turnover – no additional exemptions required. This makes Georgia’s freelancer-friendly tax system one of the most attractive globally.
Minimal Bureaucracy
Becoming a freelancer in many countries involves excessive paperwork and local requirements. In Georgia, the process is fast, simple, and foreigner-friendly:
- Documents needed: Passport, legal address, Power of Attorney (if remote)
- Processing time: 1-3 business days
- Filing obligations: Monthly and annual declarations, fully digital
Compared to other countries, Georgia offers a low-cost, straightforward setup, allowing freelancers to focus on their work rather than bureaucracy.
In Conclusion
Freelancing and remote work in Georgia offer a unique combination of legal protection, simple taxation, and minimal bureaucracy. By registering as an Individual Entrepreneur (IE) with Small Business Status (SBS), freelancers – including digital nomads and foreigners working internationally – gain a clear legal framework, favorable tax rates, and the ability to operate professionally with international clients.
With fast registration, low costs, and fully digital filing obligations, Georgia makes it easy to start and manage a freelance business while keeping more of your income. For anyone seeking a safe, efficient, and supportive environment for remote work, Georgia stands out as a top choice. For reliable legal support, our team is ready to assist you with expertise and professionalism.
